THE UNWRITTEN FUTURE

TBY talks to Antoine Tournand, Managing Director of Total Oil Turkey, on the creation of a new look and Turkey's tendency to lead the way on innovation.

BIOGRAPHY

Antoine Tournand graduated in 1989 from the French business school HEC. He also holds BAs in History and French Literature from Sorbonne University in Paris. After fulfilling his national duty as a teacher in Poland, he joined Total Group in 1993 in the downstream marketing branch. After a first experience as Management Controller, he turned to a more commercially oriented career, occupying field management positions in the French retail business. He was first appointed a country manager as Managing Director of Total Mozambique in 2003. In 2006, he was appointed to the Non-Fuel Business Development Manager for Europe focusing on the carwash, food, and services segment of 3,000 service stations throughout Europe. In 2009, he returned to operations as Managing Director of Total Ethiopia. In March 2012, he was appointed Managing Director of Total Oil Turkey.

How would you characterize the outlook for Turkey's retail fuel market?

The retail fuel market in Turkey shows a very interesting combination of strong regulations and rapidly evolving conditions combined with strong competition. It is one of the most regulated and competitive markets, which has, in my view, no equivalent. There is a saying that “the past doesn't speak for the future," and it is true for this market in a very positive way. The past was sometimes very hectic, but the future looks bright. Turkey proved to be able to overcome tough circumstances, quickly recover, and grow stronger. This is what creates long-term confidence in the future of this market. I am not betting that it will have no ups and downs over the next 10-15 years, but I do believe that whatever happens, the people have the capacity to overcome bad times and continue working for tomorrow. There are no second thoughts about “what could have been"—people take a very pragmatic approach about where they are and where they want to be in the future, and they make it happen.

How has Turkey's significance to Total evolved over the time that you have been in this market?

Regarding the retail and lubricants business that I am in charge of, we have been in this market for the past 20 years and we see it as a successful journey. We have reached a market share of about 6% in the retail business and 11% for lubricants, which makes us the fifth largest player in the market. The Turkish fuel market itself is booming in comparison to Western Europe. Turkey is both a dynamic and sophisticated market, eager to consume. There is a sustainable growth perspective since the number of cars per inhabitant is five times lower than the rest of Western Europe and half of what we see in Russia. With plenty of room to grow, the Turkish retail market is demonstrating huge potential. Total Oil Turkey wants to be part of it, and will further invest in line with this perspective. We want to be one of the reference retail players by 2018. In the recent past, we concentrated on our core retail business by selling our bottled LPG business two years ago, and then engaged in a resolute growth strategy in the retail sector. For our retail business, Turkey is a strategic place to be. Naturally, it is key because of its vibrant and sophisticated market, located between Europe, the Mediterranean region, the Middle East, and North Africa. Turkey is also a key cultural reference. Many of the people we work with elsewhere refer to our presence in Turkey as a major asset. Other group subsidiaries are also present in the chemicals industry or petrochemical segment, as well as for international transportation.

How does Total adapt its business model to different markets around the world?

The key word about our business model in retail is adaptation. Listening is the first core behavior we list in what we call the “Total Attitude." We first listen to the market, the stakeholders, and the communities we live in. Our corporate social responsibility program has a focus on children's education about road safety and our support for the Ancient City of Smyrna archeological project shows what we mean. Another core behavior is boldness. This tells a lot about the way Total Oil Turkey wants to behave. We don't compromise on our international standards, especially when it comes to safety; however, when it comes to the market, we listen and learn from our customers. As a result, the way we manage the business in Turkey is not the copy paste of what we do elsewhere, but fits to this market. For example, in our retail business the Turkish market is very specific in the way that the vast majority of stations are owned by dealers, which is unusual. We adapted to it and the relationship we developed with our dealers has become a key asset in our view.

“Many of the people we work with elsewhere refer to our presence in Turkey as a major asset."

How does Turkey compare to other markets in terms of innovation?

Customer sophistication makes it very interesting in terms of retail business. Turkey has a huge competitive edge in innovation. Customers are young and interested in the future. As a result, Total Oil Turkey fights to be one of the most innovative Total subsidiaries. As an example, our actions on social media make us one of the most active Total downstream subsidiaries, which is welcomed by our Turkish customers. Another example is the new image at our filling stations, which we began to implement in March 2012. One of the pilot sites for a worldwide project was created in Istanbul. Immediately after the project was approved at the group level, Turkey took the lead in terms of the rebranding program with 75 new look realizations by the end of 2012. Now when the company wants to learn how the “new look" is perceived by customers, they come to Turkey. Things go faster here than anywhere else, and the business environment is supportive. The Turkish contractor we worked with for the project has been selected to implement the “new look" stations in many other Total markets around the world. Everyone throughout this process in Turkey, from the dealers to the contractors and customers, has been receptive to innovation, and that is one of Turkey's strengths.

One of Total's goals in Turkey is to own 15% of the stations in your network. Why is this an important part of your growth strategy?

Competition is tough in Turkey and we expect it to remain so or become even tougher. Still, we have ambitious targets. We want to increase from 430 to 500 stations and grow our sales by 50% between 2011 and 2018. This means we are not happy solely with putting flags on the map—we want larger stations that can handle more volume. The dealers own most of the stations in this market. The general rule for a dealership contract is that it encompasses a five-year duration. Since we invest heavily in this market, we are looking for a longer presence on the sites, in compliance with all market rules. Ownership is one way to do it, and our aim is to achieve this long-term presence in at least 15% of our sites. This does not mean we want to operate all of these stations: the dealership model remains for us the reference model either through traditional relationship or on sites we own. Naturally, we also plan to grow in lubricants from our current 11% in the same way. In summary, what we want is to be recognized by more customers for the quality of our products and services; one thing we keep in mind in order to achieve it is that we are not here to “educate" the customer—we're here to serve his or her needs.